Why Michigan shouldn't single out Switch for tax breaks

Posted on December 11, 2015 at 11:45am

Michael LaFaive, director of the Morey Fiscal Policy Initiative at the Mackinac Center, authored an op-ed published by The Detroit News today. In it, LaFaive discusses the ongoing debate surrounding a proposed incentive package intended to lure Switch, a data storage company, to set up shop in the old Steelcase Pyramid Building in west Michigan.

Citing past failed incentive programs, such as the film tax credits, LaFaive suggests an alternative to singling out Switch or other data companies:

Stay Engaged

Receive our weekly emails!

email address

Any jobs or revenue predictions made by the state about Switch’s incentive package should be examined skeptically. The state — specifically the Michigan Economic Development Corp. — has a reputation for producing or buying analyses that comport with its worldview and not necessarily reality.

If the state of Michigan attempts to estimate the jobs and revenue impact that their incentive offerings for Switch will have on the state, they should also estimate the alternative scenario. Doing so would likely demonstrate that broad-based tax cuts are superior to targeted ones.

Permission to reprint this blog post in whole or in part is hereby granted,
provided that the author (or authors) and the Mackinac Center for Public Policy are properly
cited. Permission to reprint any comments below is granted only for those comments written by
Mackinac Center policy staff.